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USG Corp. Reports Operating Results (10-Q)

October 26, 2012 | About:

10qk

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USG Corp. (USG) filed Quarterly Report for the period ended 2012-09-30.

Usg Corp has a market cap of $2.63 billion; its shares were traded at around $25.21 with and P/S ratio of 0.9.

Highlight of Business Operations:

U.S. Gypsum: Net sales in the third quarter of 2012 were $382 million, up $50 million, or 15%, compared with the third quarter of 2011. Net sales of SHEETROCK® brand gypsum wallboard increased $41 million, or 35%, reflecting a 14% increase in gypsum wallboard shipments, which favorably affected sales by $17 million, and an 18% increase in average gypsum wallboard selling prices, which increased sales by $24 million. Net sales of products other than SHEETROCK® brand gypsum wallboard, including freight, were $224 million in the third quarter of 2012, a 4% increase compared to the third quarter of 2011. Net sales of SHEETROCK® brand joint compound increased $1 million, or 2%, due to 3% higher selling prices partially offset by 1% lower volume. Net sales of DUROCK® brand cement board increased $3 million as a 12% increase in volume was partially offset by a 1% decrease in selling prices. Net sales of FIBEROCK® brand gypsum fiber panels were unchanged as a 4% increase in selling price was offset by an 8% decrease in volume. Net sales of other products increased an aggregate of $5 million compared with the third quarter of 2011.

Operating profit of $22 million was recorded in the third quarter of 2012 compared with an operating loss of $10 million in the third quarter of 2011. The $32 million favorable change in operating results reflected gross profit improvements of $36 million for SHEETROCK® brand gypsum wallboard, of which $34 million was due to a higher gross margin and $2 million was due to the increase in shipments. The higher wallboard gross margin was attributable to higher selling prices, increased sales of higher margin SHEETROCK® brand UltraLight Panel products and lower per unit manufacturing costs. Gross profit for SHEETROCK® brand joint compound increased $3 million compared to the third quarter of 2011 as higher gross margin was partially offset by the decline in volume. Gross profit for DUROCK® brand cement board increased $1 million due to increased volume and a higher gross margin. Gross profit for FIBEROCK® brand gypsum fiber panels increased $1 million compared to the third quarter of 2011 as an increase in gross margin was partially offset by the decrease in volume. The increase in operating profit also reflected a $1 million aggregate increase in gross profit for other product lines and a $2 million net decrease in miscellaneous costs and selling and administrative expenses compared to the third quarter of 2011. Operating profit for the third quarter of 2011 also included a $12 million favorable adjustment due to a third quarter 2011 settlement with United States and Canadian tax authorities related to the deductibility of certain expenses in the years 2003 through 2006 that had the effect of reallocating those expenses from U.S. Gypsum to CGC and our Windsor operations.

CGC (gypsum): Net sales in the third quarter of 2012 were $81 million, an increase of $3 million, or 4%, compared to the third quarter of 2011. Net sales of SHEETROCK® brand gypsum wallboard increased $4 million due to a 12% increase in volume that was partially offset by 2% lower selling prices. Net sales of joint treatment products declined $1 million, while net sales of other non-wallboard products increased $1 million. Currency translation had a $1 million unfavorable impact on net sales. Operating profit in the third quarter of 2012 was $3 million, compared to an operating loss of $7 million for the third quarter of 2011. This variation primarily reflected a $9 million unfavorable adjustment in 2011 related to the settlement with United States and Canadian tax authorities. Gross profit for gypsum wallboard increased $1 million primarily due to the higher volume and a 3% decrease in per unit manufacturing costs, partially offset by the lower selling prices. A gross profit decline of $2 million for joint treatment products was offset by a $2 million decrease in miscellaneous costs. Gross profit was unchanged for other non-wallboard products.

USG Mexico: Net sales for our Mexico-based subsidiary were $42 million in the third quarter of 2012, unchanged from the third quarter of 2011. Sales increases of $4 million for gypsum wallboard, reflecting 15% higher volume and 10% higher selling prices, $2 million for DUROCK® brand cement board and $1 million for joint treatment products, was offset by a $3 million decline in sales of other products and a $4 million unfavorable impact of currency translation. Operating profit was $6 million in the third quarter of 2012, unchanged from the third quarter of 2011, as a gross profit increase of $1 million for gypsum wallboard was offset by a $1 million gross profit decline for DUROCK® brand cement board. Gross profits for all other product lines were unchanged compared to the third quarter of 2011.

USG Interiors: Net sales for our domestic ceilings business in the third quarter of 2012 were $121 million, unchanged from the third quarter of 2011. Net sales of ceiling grid increased $2 million compared to the third quarter of 2011 reflecting a 3% increase in volume, which favorably affected sales by $1 million, and a 2% increase in selling prices which also contributed a $1 million increase in sales. However, the higher level of ceiling grid sales was offset by a $2 million decline in net sales of ceiling tile. A 5% decline in ceiling tile volume, which lowered sales by $4 million, was partially offset by a 3% increase in ceiling tile selling prices, which favorably impacted sales by $2 million.

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